UPDATE 1-Irish govt warns voters against 'jump in the dark'

April 26, 2012|Reuters

* Ireland can't afford to add to EU instability -minister

* Says no vote would block Ireland from new bailout fund

* Treaty would not bring additional austerity

By Conor Humphries

DUBLIN, April 26 (Reuters) - Ireland's finance ministerwarned voters on Thursday that if they reject the EuropeanUnion's new fiscal treaty at a referendum it will be a "jumpinto the unknown" that the country can ill afford.

Ireland will hold probably the only popular vote on theGerman-led plan for stricter budget rules on May 31, and anopinion poll last week showed a narrow lead for supporters ofthe treaty, but with 40 percent still undecided.

Ireland's third largest trade union, Impact, on Thursdaysaid it would back the treaty, warning of "dramaticconsequences" of a no vote, a boost for the government afterthree smaller unions recommended a rejection.

In his first major speech of the campaign, Finance MinisterMichael Noonan warned that the uncertainty around elections inFrance and Greece had the potential to spook markets and thatthe last thing Ireland should do is create more trouble.

"The Irish electorate is conservative and the Irishelectorate likes to vote for certainty," he told a businessconference.

"Certainty is on the 'yes' side ... the plunge in the dark,the jump into the unknown is all on the 'no' side of thisparticular argument."

Irish voters have twice rejected complex European treatiesat referendum, in part due to warnings from lobby groups thatvoting yes could undermine Ireland's neutrality or conservativesocial legislation. Both times they reversed course afteradjustments were made to address those concerns.

The treaty needs the approval of only 12 of the 17 euro zonecountries to be ratified, but an Irish rejection would undermineone of Europe's key plans for overcoming its debt crisis, nowspreading from Spain to the Netherlands.

That instability, which could be exacerbated by elections inFrance and Greece, makes Ireland's choice all the moreimportant, Noonan said.

"We can't control other peoples agendas. All we can do iscontrol our own agenda. It is very important that we don'tcreate trouble for ourselves," he said.

"We don't want to be knocked off course."

Noonan conceded that the treaty would force the governmentto cut its budget deficit from a projected 3 percent in 2015 to0.5 percent in 2018, but rejected opposition claims that thiswould lead to three more years of painful austerity, sayingnormal growth in the economy would bridge the gap instead.

INSURANCE POLICY

He also again warned a no vote would cut Ireland off fromadditional funding from the EU's new bailout fund, the EuropeanStability Treaty, a vital "insurance policy" as it attempts toreturn to borrowing from international bond markets next year.

The IMPACT trade union, which represents 63,000 workers inthe services and public sectors, cited cheap funding from Europeas the main reason its member's should vote yes.

Cutting off Ireland from bailout funds "would lead to alarge and sudden reduction in exchequer funding, with dramaticconsequences for social welfare benefits, pensions, publicservices," the union said in a statement.

An umbrella group of unions on Wednesday said it could notsupport the treaty as its members were split on the issue.

The argument that a yes vote is the safe choice is likely tobe central to the government's campaign in winning over anessentially conservative electorate, said Theresa Reidy, apolitical lecturer at University College Cork.

"A lot of the time it is rational to vote no if no means nochange whereas this time around the status quo will," she said.

"What the 'yes' side really need to do is show that it's notrational to vote 'no'."